Late Fee on a $500 Invoice, 30 Days Overdue
Interest at 1.5% a month
$7.50
1.5% a month, simple interest charged pro rata by day, with no flat fee added.
How that number is worked out
These are the figures this page was built with and every line the calculator produces from them. Change anything above and all of it moves.
- Unpaid invoice amount500 $
- Late fee rate you wrote in the contract1.5 % per month
- Days past due30
- Flat fee, if your contract has one0 $
Now owed$507.50
| Original invoice | $500.00 |
|---|---|
| Days late | 30 (1 months) |
| Interest at 1.5% a month | $7.50 |
| Flat fee | $0.00 |
| Total now due | $507.50 |
| Annual rate this equals | 18% |
| Per day from here | $0.25 |
Days past due compared
Interest is simple and pro rata by day, so it climbs in a straight line rather than accelerating.
| Days past due | Now owed | Total now due |
|---|---|---|
| 30 days | $507.50 | $507.50 |
| 60 days | $515.00 | $515.00 |
| 90 days | $522.50 | $522.50 |
| 120 days | $530.00 | $530.00 |
What else matters here
Five hundred dollars at 1.5 percent a month is $7.50 of interest in 30 days, a total of $507.50, and 25 cents a day after that. At 90 days it is $22.50.
The number that decides whether you ever collect it is not the rate, it is the due date. An invoice that says net 30 has a date on it and a day it becomes late. An invoice that says due on receipt has neither, which is why it is the weakest term on any small contractor's paperwork: there is nothing to point at when you claim the money is overdue.
Write the actual date the money is due on the invoice itself, alongside the terms and the fee rate. Net 30 from the invoice date, net 30 from the completion date and net 30 from approval are three different deadlines, and the one the customer assumes is always the latest of them.
What this calculator assumes
- A late fee is only collectable if it was in the contract or on the invoice before the invoice went late. A fee that first appears in a reminder email is not enforceable anywhere.
- 1.5 percent a month is 18 percent a year and is the common trade figure, but states cap this. Several cap it below 18 for consumer work, and a rate over the cap can void the whole fee clause, not just the excess.
- Interest here is simple, charged pro rata by day. Compounding monthly is legal in some states and not others, so the simple figure is the safe one to put on paper.
Questions people ask
What is the late fee on a $500 invoice at 30 days?
$7.50 at 1.5 percent a month, making $507.50 due in total and 25 cents a day from there.
Is due on receipt a good payment term?
It is the weakest one. It gives no date to point at, so there is no clear day the invoice became late. Net 30 with the actual due date printed on the invoice is stronger.
Can I charge a late fee if it was not in the contract?
No. A late fee is only collectable if it was in the contract or printed on the invoice before that invoice went late. A fee that first appears in a reminder email is not enforceable anywhere, however overdue the money is.
The late fee calculator takes any dimensions you like and hands back the same list.